Dubai: Sharjah can claim its spot as a favoured destination for a new crop of startups and freelancer backed businesses, even as some of its free zones launch special incentives such as instant licensing approvals and highly competitive rates for registration and tenancy.
Sharjah’s startup scene had been quite active – before and in the post Covid phase – but market sources reckon that a lot more can be achieved. “A lot of attention has been given to SMEs, and rightfully so, as being one of the levers for UAE’s economic growth,” said a banker. “But there is space that can be created for ‘micro’ businesses with capital needs well below Dh5 million.
“The current environment is quite suitable for such businesses and the entrepreneurs behind them. There is government support available, most notably in single-individual run businesses.”
Such micro-businesses can be in any category, but tech, F&B and the wider services sectors are seen as natural fits. Also, it helps if businesses represent as many categories as possible unlike during the initial Covid phase when a majority of startups wanted to get into ecommerce, logistics and delivery services.
Government sources and businesses themselves realise that there can only be a certain number of entities that can afford to stay once the initial phase of growth is over.
It will be against this backdrop that the latest edition of the Sharjah Entrepreneurship Festival opens in the emirate, setting the stage for a fresh batch of startups to emerge and get their bearings.
We expect the next wave to focus on building for the opportunities that are idiosyncratic to the region.
“The first wave of innovation was primarily focused on adapting global business models for local consumption (models such as ride hailing, online marketplaces, listings/classifieds etc).
“We expect the next wave to focus on building for the opportunities that are idiosyncratic to the region.”
In June last, Sharjah was ranked second in the Top 5 Emerging Ecosystems according to Startup Genome’s Global Startup Ecosystem Report (GSER).
Over two days, business owners and potential entrepreneurs get to meet industry stakeholders and mentors at the Sharjah Research Technology and Innovation Park. Ideas and concepts that impress will find keen listeners and, if matters proceed to the next stage, the funds to back them up.
“Through nine specially curated mini-ecosystems and engaging stages, the festival is ready to feature hundreds of impactful activities that include 50 plus talks and discussions,” is what the promoters of the event are saying.
There will be 30 plus upskilling workshops, as well as ‘empowering pitch competitions and awards featuring 100+ startups’. And even as dedicated ‘Investor Lounge’ for ‘investor-investee collaboration and partnerships’.
Are startup funds available?
Based on feedback multiple industry sources, the impression is that the size of the venture capital funding available in the region dropped in 2023. The year before wasn’t all that of a trendsetter on the funding side of things. At the same time, more established startups – say, who have been operational for 4-5 years and shown they can sustain themselves – are picking up heavy funding in their ongoing rounds. Check out some of the fintechs, bespoke logistics services firms, and BNPL (buy now pay later) platforms, and you will find investors were lining up with their check-books.
“What’s happening is that funds are available for entities that have moved past the seeding and early capital round phases,” said a VC analyst. “Early stage startups are who’s finding things difficult.
“Because there is so much of competition from other asset classes, there is serious diversion of funds from VCs and private equity players.”
Licenses? It’s ‘instant’
Meanwhile, Sharjah’s economic hubs keep innovating. Last month, the Sharjah Publishing City Free Zone announced it would offer applicants to choose from three activities for the instant licence. The time taken for the licence approval will be 45 minutes.
The free zone is also authorised to issue a dual license (mainland and free zone).
Expect more initiatives from the emirate’s multiple economic zones, industry sources add. Sharjah can offer competitive rates on cost of entry and this will count as a big plus among startup founders.
“We at SAIF Zone affirm our commitment to creating an environment for attracting investments to Sharjah,” said Saud Salim Al Mazrouei, Director of the zone at a recent industry event for the gold and diamond sector.
It’s the same mantra that Sharjah is repeating to the entrepreneur fraternity at the ‘festival’ today and tomorrow…